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Don’t be a SOP abuser – get your evidence right the first time

In its decision of Ku-Ring-Gai Council v Ichor Constructions, the Supreme Court of NSW restrained a claimant from making a second adjudication application under the Building and Construction Industry Security of Payment Act 1999(NSW) because it would be an abuse of the SOP Act’s processes.

In February 2014, Ichor Constructions (Ichor) made a SOP adjudication application against Ku-Ring-Gai Council (Council) for a claim which included $528,990 for delay costs (Delay Claim). The Delay Claim was substantiated with a report of computerised calculations on the period of delay (iSet Report). In his determination, the Adjudicator stated:

"From the information before me and given that the analysis employed in the iSet Report is computer driven, I am unable to replicate the assessment process in order to assess the true extent of Ichor's entitlement to an EOT. This should not be interpreted to mean that I have assessed it as Nil. I have simply been unable to assess it. It follows, that I am unable to assess the quantum of the delay costs claims."

On July 2014, Ichor claimed and applied for adjudication again in respect of the Delay Claim, this time with revised evidence prepared to 'address the shortcomings of the first iSet Report'.

The Council applied to court for a declaration that the Delay Claim:

could not be determined as it was subject to issue estoppel; and

constituted an abuse of process.

Stevenson J said that as the Adjudicator did not determine the Delay Claim issue estoppel did not arise. However, the repetition of claims did constitute an abuse of the SOP Act's processes as the deficiencies in the evidence that meant the Adjudicator felt he could not determine the Delay Claim were solely in the control of the claimant. The mere repetition of a claim is not of itself an abuse of process. The fact that the evidence in the subsequent adjudication application addressed the shortcomings of the original evidence (which could have been addressed in the original adjudication) meant that this repetition of the claim amounted to an abuse of process.

Stevenson J also noted that the adjudicator could have (and perhaps should have) valued the Delay Claim at nil on the basis that Ichor failed to make out its claim. In these circumstances it would appear that issue estoppel would have come into play.

In an important lesson for both claimants and respondents, the quality of evidence placed in front of an adjudicator must be valid, logical and effective as an attempt to make good the shortcomings in the evidence in a subsequent adjudication will likely constitute an abuse of the SOP Act's processes.

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